Parts of the complaint read like a re-living of the ASD scheme, with Zeek Receiver Kenneth D. Bell alleging Zeek’s penny-auction arm (Zeekler) was in trouble early on and that Zeek operator Paul Burks borrowed money from another insider to keep things going. The fraud later expanded massively, Bell alleged.

At one point, according to Bell, former Zeek COO Dawn Wright-Olivares “excitedly” told Burks, “I think we can blow this OUT together — we’ve already attracted a great many big fishes.”

But the insiders “were aware that the payouts to Affiliates would be funded by new participants rather than retail profits from the penny auctions,” Bell alleged.

Named defendant “insiders” were Burks of Lexington, N.C.; Wright-Olivares of Clarksville, Ark.; Daniel Olivares of Clarksville, Ark.; the estate of the late Roger Anthony Plyler of Charlotte; Alexandre “Alex” de Brantes, the husband of Wright-Olivares and a resident of Clarksville, Ark.; and Darryle Douglas of Orange, Calif.

Burks, the receiver alleged, received “in excess” of $10 million from Zeek; Wright-Olivares received more than $7.8 million; Daniel Olivares received more than $3.1 million; Plyler, who once lent money to Burks, received more than $2.3 million; Douglas received more than $1.975 million. An amount was not listed for de Brantes.

Named winners were former AdSurfDaily member Todd Disner of Miami (more than $1.875 million); former ASD member Jerry Napier of Owosso, Mich. (more than $1.745 million); Trudy Gilmond of St. Albans, Vt. (more than $1.75 million); Durant Brockett of Las Vegas (more than $1.72 million); Darren Miller of Coeur d’Alene, Idaho (more than $1.635 million); Rhonda Gates of Nashville (more than $1.425 million); Michael Van Leeuwen, also known as “Coach Van” of Fayetteville, N.C. (more than $1.4 million); David Sorrells of Scottsdale, Az. (more than $1 million); T. Le Mont Silver Sr. of Orlando, Fla. (more than $773,000 under at least two user names, and more than $943,000 through a Florida shell entity known as Global Internet Formula Inc. with one or more Zeek user names).

One of Silver’s usernames was “mentor,” Bell alleged.

Also named winners were Karen Silver, Silver’s wife (more than $600,000); veteran HYIP pitch team Aaron and Shara Andrews of Lake Worth, Fla. (more than $1 million through a Florida shell entity known as Innovation Marketing); David and Mary Kettner of Peoria, Az. (more than $930,000 via one or more user names and shell companies known as Desert Oasis International Marketing LLC and Kettner & Associates LLC); Lori Jean Weber of Land O’Lakes, Fla. (more than $1.94 million through a shell company known as P.A.W.S. Capital Management LLC).

Bell also sued a “Net Winner Class” of as many as 9,000 U.S. residents or entities who allegedly harvested illicit gains of $1,000 or more from Zeek. Lawsuits against international winners will come later, Bell said.

In December 2013, Wright-Olivares and Olivares were charged criminally. They pleaded guilty last month for their roles in the scheme and are liable for more than $11.4 million in restitution and penalties, the SEC said.

As the SEC previously alleged, Zeek relied on a so-called “80/20” program to sustain the Ponzi deception. Bell today built on that theme. From the complaint against insiders (italics added/spacing modified):

Dawn Wright-Olivares explained and promoted the plan in a Skype chat as follows:

Here’s a scenario here where you could be receiving $3,000 per month RESIDUALLY. Let’s use a 1% daily cash-back figure in this example (Please note: This is only an example and the actual amount will vary day to day).

When you reach 50,000 points in your account, then you could start doing an 80/20 cash-out plan. Pay close attention? When you hit 50,000 points in your account, if the daily cash-back percentage is 1%, ZeekRewards will be awarding you with $500.00 each day. First of all, did you catch that? … you’re making $500 per day … it’s your money! Ok, the 80/20 plan works like this, take 80% of that $500 (or $400) and purchase more VIP bids to give away to new customers as samples to continue growing your points balance.

Then, keep doing what you’ve been doing every day, which primarily consists of giving free bids away as samples and placing one free ad per day for Zeekler.com’s penny auctions and submitting into your ZeekRewards back office. Then, pull out 20% of the $500 (or $100) and request a check weekly. That’s $700 per week, or about $3,000 per month in residual income! And keep in mind, these amounts can continue to grow day after day and month after month.

HYIP schemes, including ASD and Zeek, often implement deceptions such as 80/20 programs as part of a bid to reduce cashout amounts to let the scheme continue to live. Insiders and veteran Ponzi pushers typically know they’re a crock.

Daniel Olivares, Bell said, has a Zeek user name of “dcolive.”

On June 14, 2012, about two months prior to the collapse of Zeek, RealScam.com moderator and PP Blog poster “Glim Dropper” posted a link on the PP Blog that established a tie between Zeek promoters and ASD promoters. ASD was a $119 million Ponzi scheme operated by now-jailed operator Andy Bowdoin.

RealScam.com is an antiscam forum.

The link “Glim Dropper” posted was at a URL styled “dcolive.com.”

From “Glim Dropper’s” observations at the time (italics added):

I’d draw your attention to about five minutes into the call when Dawn recalls a conversation with Jerry Napier. Jerry was quoted as loving ZR and never wanting to have to build another organization with another program and mentioned a previous program and the litigation it was still facing and he mentioned “similarities” between ZR and that previous program.

It is common in the HYIP sphere for promoters to move from one fraud scheme to another.

Napier’s exposure to ASD is unknown. But the Zeek receiver now says Napier received illicit gains of more than $1.745 million. The alleged illicit Zeek gains of former fellow ASD member Todd Disner are even higher: $1.875 million.

Precisely how many ASD members went on to join Zeek is unclear. What is clear is that both firms used similar business models and sweetened the deal for certain members.

Bell alleged today that Zeek had a “Sweet 16” deal in which participants paid $999 to mine even more “passive” gains.

“The Sweet 16 was another means by which [Rex Venture Group] made payments on a passive investment,” Bell alleged. “It did not involve the sale of a product, nor did it require a member to recruit other participants into the program.”

Disner once filed suit against the United States, alleging its ASD Ponzi case was a “tissue of lies” and a “house of cards.” A federal judge tossed the lawsuit, after Bowdoin pleaded guilty to wire fraud and admitted ASD was a Ponzi scheme.

I am looking forward to the next round of criminal charges that are coming. It is going to be interesting to see just who all gets this special privilege besides Daniel and Dawn. I’m sure they have talked and talked, and talked to get their plea deal.

What is truly interesting is the 9,000 in the class action claim as well as the top 10 net winners. Going to be a fun year of court cases.

Aaron and Shara Andrews were named in the top 10 net winners and glad to see them being sued. They have been in every major Ponzi going just like Ken Russo. Kind of surprised that Ken did not settle but took this route, but glad he didn’t. Hopefully this will finally put him on the radar of the authorities.

Scott Miller “retired” from the gifting pyramid scheme The People’s Program with a claimed $2 million. On the other hand, John Bain, the head of TPP, has claimed in private communications that Miller’s departure from that scheme was not on good terms, nor voluntarily for Miller.

Scott Miller had been running an online school training people to do cash gifting. I wonder if his training practices in Telexfree and other funny money games are derived from that “university?”

Longtime readers will recall that AVG claimed its bank account had been suspended, but then said it had found an offshore facilitator — on the same day the President of the United States announced a crackdown on offshore fraud.

There’s also that conference call after the Zeek collapse, with T. Lemont, Todd Disner and Robert Craddock on the line. Craddock, Disner and T. LeMont tried to poison the well against the Zeek receiver. T. LeMont told a tale about how he (T. LeMont) had been a victim in an earlier Ponzi scheme.

He didn’t say which one, but if it was ASD, then he’s in Disner’s class.

Bowdoin, BTW, claimed OneX was good for college students and claimed it had an “attorney.” T. LeMont claimed the OneX positions being given away were worth $5,000.

Bowdoin said that $5 sent to OneX could fetch a return of $99,000 very quickly.

I am wondering if some of the names we thought would be on this list that aren’t settled with the Receiver and that’s why they’re not?

I know John Schepcoff claimed to be a big winner in Zeek and I did not see his name, which made me believe he settled since he is in trouble with his role in Profitable Sunrise (SEC sent him a subpoena).

Since the receiver has now officially filed litigation against the net winners (wonderful), will this possibly cause more net winners to contact the receiver to seek settlement? I am of the opinion many net winners will now seek settlement with the receiver unless there is some law that now prevents early settlement (I think not). Your thoughts on this question are appreciated.

Bob Mercer: Since the receiver has now officially filed litigation against the net winners (wonderful), will this possibly cause more net winners to contact the receiver to seek settlement? I am of the opinion many net winners will now seek settlement with the receiver unless there is some law that now prevents early settlement (I think not). Your thoughts on this question are appreciated.

Hello Bob,

From the receiver on March 3:

“Although litigation against net winners has now begun, and I intend to pursue it vigorously to obtain Judgments, including interest, against all defendants and class members, I REMAIN WILLING TO SETTLE [emphasis added] the Receiver’s claims with those willing to repay a significant portion of their net winnings. Net winners who want to discuss settlement should indicate their interest by email to [deleted by PP Blog] . . .”

I was coned into putting money into Zeek and still waiting for some kind of return from the receiver. Then, as stupid as it sounds, I was lured into Profitable Sunrise by some of the same people. Lost money in that too………do you have any info for us about “ProSun”?